Integrating Stakeholders into the Governance of Data Exchange from Smart Metering

Abstract

The electricity supply chain is changing due to the integration of renewable energies. Two developments are in the focus of this paper: First, the emergence of third parties and second, the requirement for information management (i.e. the management of data exchange from smart metering) as a new step in the supply chain. Information management needs to secure the neutral and non-discriminatory integration of third parties into smart grids. This can be accomplished by a collaborative governance approach. Based on veto player theory we identify two key issues for the voting process within a collaborative governance approach for information management. First, we show that a voting process based on “individual veto players” will result in governance lock-in situations, where governance innovation will be impeded. Second, we discuss that “collective veto players” can secure governance innovation for information management, but that the non-discriminatory integration for third parties might be at stake, if less than a qualified majority is required to vote on a veto.

How decentralization drives a change of the institutional framework on the distribution grid level in the electricity sector – The case of local congestion markets

“…With decentralization, these costs are likely to increase (Brunekreeft & Ehlers 2006). Therefore, there are doubts whether ownership unbundling would be an efficient solution overall (see (Buchmann, 2016;de Nooij & Baarsma, 2009;Hoeffler & Kranz, 2011;Brunekreeft, 2014)).…”

“…While the first platform model assigns the responsibility for platform ownership and market operation to an independent third party, this model proposes to assign the same tasks to a body which is established by the legally unbundled network operators (similar to data exchange platforms operated by different DSOs e.g. in Belgium (Buchmann, 2016)). Under the assumption that all these network operators are legally unbundled, the risk of discrimination is reduced compared to the base case with just one legally unbundled DSO, though not to a significant extent.…”

“…PJM, Pennsylvania-New Jersey-Maryland (PJM) interconnection, which is a regional transmission organization in the US provides an example for an application of collaborative governance in the energy sector. PJM operates the largest competitive wholesale market worldwide (located in the US) and successfully applies a stakeholder approach to govern this market (Buchmann, 2016).…”

“…via majority voting). Identifying the right balance between these two sides is a challenging task and it is outside the scope of this paper to elaborate on this (for further details on the voting process and potential implications on innovation see (Buchmann, 2016) and (Buchmann, 2017a)).…”

“…In this sense, the CFP could substitute the regulators role in defining market rules for the local congestion market. Thereby, the CFP provides a solution to overcome the information asymmetry, which exists between the regulator and the involved market parties (Buchmann, 2016).…”